Is the dull dog of international banking really a sanctions-busting rogue

If you had asked me last week for a thumbnail sketch of Standard ­Chartered, I might have said: ‘Steadily profitable overseas bank, strong historic franchise in Asia and Africa, keeps its nose clean.’I might have added that Peter Sands, its chief executive, and Lord (Mervyn) Davies, his predecessor who went on to serve as trade minister, are among the few British bankers whose reputations have actually risen in recent years. But suddenly this dull old dog of the international banking scene stands accused in New York of being a ‘rogue institution’, up to its neck in Iranian sanctions-busting, and its share price has plunged by a quarter in response.

The allegation is that the bank processed $250 billion of illegal transactions with Iranian institutions, but Standard Chartered says the actual figure is no more than $14 million. US regulators have a history of excessive zeal in pursuit of foreign firms suspected of flouting sanctions that have generally failed (as they have so far in Iran) to deter or dislodge the regimes against which they are targeted: Barclays, Lloyds and Credit Suisse are among those previously fined for Iranian connections. I will be very surprised if these accusations against Standard Chartered stand up in full — but then I am constantly surprised by transgressive patterns of behaviour across the whole banking world these days. So let us wait and see.

Against the odds

‘We’re all deluding ourselves,’ was one reader’s comment on last week’s round-up of indicators that seem to contradict dismal double-dip GDP numbers. I think he meant that the most deluded of us all is me, because I insist on accentuating the positive, but his remark prompted a new thought: if it was delusion that got us into this mess, it will be delusion that gets us out of it again.